Something smells very bad about this news…. GM has been issued it’s first $4B in government bail-out loans by Treasury, and GMAC has been given another $6B in TARP loans independent of the Big 3 bail-out funding. More funding to come for GM and for Chrysler.
You knew Chrysler was wholly owned by Cerberus, what you didn’t know is that Cerberus owns 51% of GMAC too!
General Motors, with 49%, no longer owns the controlling interest in "General Motors Acceptance Corporation"!
Note: Cerberus Capital Management is a Limited Partnership… NOT a publicly traded stock. A relative handful of very wealthy individuals own Cerberus, and thus 100% of Chrysler, and now we note, 51% of GMAC. A very large percentage of GM cars are sold with financing from GMAC. It seems that Cerberus benefits not only from what Chrysler is given directly, but from what GMAC is given and what GM sells as a result of what GMAC loans!
I was alarmed when the government considered offering bail-out funding to Chrysler when I heard it was NOT a publicly held company.
I am doubly alarmed to learn that the $6 Billion loaned to GMAC, supposedly to help citizens buy GM cars, is actually 51% contributing to the success of this same PRIVATE PARTNERSHIP!
Use the link above to read about the leadership of Cerberus… you will be find lots of relationships between the management of Cerberus, GMAC and the George H. W. Bush administration. For example, George H. W. Bush’s Treasury Secretary, John W. Snow, is the chairman of the board at Cerberus. A major partner in Cerberus is the chairman of GMAC.
What I hate about "big government" is that it so easily finds excuses for aiding both "big labor" and all the "good old boys" in the back room! This is what the Democratic congress and the Republican (in name only) Bush administration has done by orchestrating this bail-out fiasco! The two political parties can wail and scream about excessive spending… but only when the excessive spending doesn’t benefit their friends and benefactors.
Congress OFTEN "achieves consensus" on spending by compromise: "I’ll ignore your shady deals if you ignore mine!" This is how "pork" is traded on the floor of congress. Politicians also gain leverage by getting "dirt" on their opponents, maneuvering them into compromising deals. Now we see, if we can sufficiently grease the palms of labor, and sufficiently alarm the people, even the executive branch can play the game. All the constituents get what they think is a good deal, and they all turn their heads and look away at the injustice and criminality taking place just under the covers…. because, after all, "we must save the economy for the common good," and "our constituents benefit."
Never mind that some benefit much more than they deserve. Never mind that our children are being put into debt. Never mind that we’re exporting our recession to the 3rd world. Never mind that we’re sucking out of the 3rd world all their talent (doctors, engineers and technicians) and investment capital. We wouldn’t want them to invest in their own communities would we? We want them working here and investing here where the the rich owners of Cerberus benefit. Not a problem if we pay off the labor unions and the minorities and the rich and powerful. That’s just the way "things get done".
Like I said, something stinks about this deal.